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IBM teams with Epic to bid for DHMSM contractIBM announced that it will team with Epic, the market-leading provider of electronic health records, to compete for the Department of Defense Healthcare Management Systems Modernization contract. With 9.7M beneficiaries, including active duty, retirees and their dependents, DHMSM will replace and modernize the Military Health System clinical systems. IBM and Epic will propose a solution to transform the MHS leveraging Epic's high performance, interoperable and secure EHR software which is used by a majority of the U.S.'s healthcare leaders including Johns Hopkins Medicine, Partners HealthCare, Cleveland Clinic and Kaiser Permanente. The combination of IBM and Epic brings complementary strengths and track-records of delivering successful on-time, on-budget projects to large multi-regional healthcare organizations that match the MHS in size and project scope.

IBM falling after Q2 earnings shows further decline in revenuesAfter the close, IBM (IBM) reported second quarter earnings and backed its fiscal 2015 guidance. WHAT'S NEW: IBM reported Q2 earnings per share of $3.84, above consensus estimates of $3.78, and Q2 revenue of $20.8B, below analyst expectations of $20.95B. IBM said Global Technology Services segment revenues were down 10% percent, Software segment revenues were down 10%, and Systems Hardware segment revenues were down 32%, although IBM noted that revenues from the its strategic imperatives -- cloud, analytics, and engagement -- increased more than 20% year-to-date. The company also backed its FY15 EPS guidance of $15.75-$16.50, against a consensus of $15.88. During the earnings conference call, management said the company expected Q3 revenue to be similar to that of Q1, which was $19.6B, below the Q3 revenue consensus of $19.98B. WHAT'S NOTABLE: On its conference call, IBM stated that it expects the currency impact for FY15 to be worse than it anticipated 90 days ago. ANALYST REACTION: Research firm Cantor put out a note following the earnings announcement stating that IBM delivered a "healthy Q2" and the firm maintained its Buy rating and $198 price target on the stock. The firm added that "IBM represents an attractive value" due to its 3% dividend yield and 35% P/E discount to the S&P 500. PRICE ACTION: Shares of IBM are down 5.2% to $164.25 in after-hours trading.

IBM revenues from strategic imperatives up more than 20% year-to-dateRevenues from the company’s strategic imperatives --- cloud, analytics, and engagement --- increased more than 20% year-to-date, more than 30% adjusting for currency and the divested System x business. Total cloud revenues increased more than 50%, more than 70% adjusting for currency and the divested System x business year-to-date, and is $8.7B over the last 12 months, adjusted for the divested System x business. The annual run rate for cloud delivered as a service -- a subset of the total cloud revenue -- increased to $4.5B from $2.8B in the second quarter of 2014. Revenues from business analytics increased more than 10%, more than 20% adjusting for currency, year-to-date. Revenues from mobile more than quadrupled, and social revenues increased more than 30%, more than 40% adjusting for currency, both year-to-date.

IBM reports Q2 revenues from the Software segment were doen 10%Revenues from the Software segment were down 10% to $5.8B, down 3% adjusting for currency compared with the second quarter of 2014. Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were $4B, down 7%, flat adjusting for currency, year-to-year. Operating systems revenues of $0.4B were down 17% percent, down 9% percent adjusting for currency year-to-year.

IBM reports Q2 Global Technology Services revenues down 10%Global Technology Services segment revenues were down 10% percent, up 1% percent adjusting for currency and the divested System x business, to $8.1B. Global Business Services segment revenues were down 12%, down 3 percent adjusting for currency, to $4.3B. The estimated services backlog as of June 30 was $122B, up more than 1% year-to-year adjusting for currency.

IBM July weekly volatility elevated into Q2 and outlook IBM July weekly call option implied volatility is at 48, August is at 23, September is at 19 compared to its 52-week range of 12 to 28, suggesting large near term price movement into the expected release of Q2 results on July 20.